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Firm Hira Lal Girdhari Lal and anr. Vs. Baij Nath Hardial Khatri - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 6 of 1954
Judge
Reported inAIR1960P& H450
ActsCode of Civil Procedure (CPC), 1908; Indian Contract Act - Sections 49
AppellantFirm Hira Lal Girdhari Lal and anr.
RespondentBaij Nath Hardial Khatri
Cases ReferredRein v. Stein
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....s.s. dulat, j. (1) messrs. das mal baij nath of amritsar supplied certain goods to messrs. hira lal girdhari lal of haibergaon district nowgong in the assam state. the goods, it is said, were supplied on credit. the price was apparently not paid, and to recover, it the proprietor of firm das mal baij nath brought a suit at amritsar. objection was taken to the jurisdiction of the amritsar court on the grounds that neither the defendant resided there nor had any part of the cause of action arisen at amritsar. the trial court agreed and, therefore, held that it had no jurisdiction and returned the plaint to be presented in the proper court.the plaintiff appealed and the learned district judge was persuaded that if the goods were supplied on credit, then a relationship of creditor and debtor.....
Judgment:

S.S. Dulat, J.

(1) Messrs. Das Mal Baij Nath of Amritsar Supplied certain goods to Messrs. Hira Lal Girdhari Lal of Haibergaon district Nowgong in the Assam State. The goods, it is said, were supplied on credit. The price was apparently not paid, and to recover, it the proprietor of firm Das Mal Baij Nath brought a suit at Amritsar. Objection was taken to the jurisdiction of the Amritsar Court on the grounds that neither the defendant resided there nor had any part of the cause of action arisen at Amritsar. The trial Court agreed and, therefore, held that it had no jurisdiction and returned the plaint to be presented in the proper Court.

The plaintiff appealed and the learned District Judge was persuaded that if the goods were supplied on credit, then a relationship of creditor and debtor was created between the parties and, on the principle that the debtor must seek his creditor to pay the money, he held that the Amritsar Court would have jurisdiction. The learned Judge, therefore, sent the case back to the trial Court to find if the goods were actually supplied on credit, observing that if that was proved the Amritsar Court would have jurisdiction. Against this order the defendant brought a second appeal to this Court which came up for hearing, in the first instance, before Bishan Narain J.

It was urged on behalf of the appellant that unless it could be shown that there was an agreement either express or implied, that the money was to be paid at Amritsar, the Courts at Amritsar could have no jurisdiction to try the dispute, and that in our law there was no such rule, as mentioned by the learned District Judge, that a debtor must seek his creditor and consequently payments must be made at the creditor's place of residence or business. Bishan Narain J. considered this question sufficiently important to be decided by a larger Bench and, therefore, referred the case to a Division Bench, and that Bench in turn referred it to this Bench, finding that a decision of a Division Bench of this Court in Niranjan Singh v. Jagijit Singh, (S) AIR 1955 Punj 128 supporting the appellant's contention was in conflict with certain decisions of other High Courts.

(2) The case has been argued before us on the assumption that there is in English Law a rule that if money is borrowed and no place for its return is agreed upon, either expressly or impliedly, the debtor must pay at the place of the creditor, and the controversy merely is whether the same or a similar rule applies in India. I have said 'on the assumption' because in the absence of accurate information concerning the state of the law in English it would be somewhat presumptuous for this Court to affirm without qualification that a particular rule of law does or does not hold good in England. The question for our decision, however, merely is whether such a rule holds good under our law in order to determine whether a particular suit can be brought at a particular place.

(3) It is admitted that to determine the place of suing we are bound by the provisions contained in the Code of Civil Procedure and those are in Ss. 15 to 25 the relevant section being admittedly S. 20. This runs-

'20. Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction--

(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for again; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part arises.' It is common ground that a part of the cause of action does arise at the place where money due under a contract is to be paid. It is agreed before us that if the parties agree, either expressly or impliedly, that payment is to be made at a particular place, a part of the cause of action arises at that place and the suit would be triable there. The question is what happens when there is no such agreement, either express or implied. The appellant's contention in the present case is that unless it can be shown that the parties in fact agreed, either expressly or by implication, that payment was to be made at Amritsar, the cause of action or a part of it cannot be said to arise there and the Amritsar Courts can, therefore, have no jurisdiction. Mr. Sodhi for the respondent admits this but only to a limited extent.

He agrees that it has to be shown that the money due from the appellant was payable at Amritsar, but this, he says, need not be proved as a fact but can be inferred as a matter of law, the law being that payment in the absence of an agreement--express or implied--must be made at the creditor's place. This takes us to the law of contract which, as far as this country is concerned, is to be found in the Indian Contract Act (IX of 1872). Mr. Sodhi is unable to point to any provision in the Contract Act to support his contention that, apart from any agreement between the parties, money borrowed is to be paid back to the creditor at the creditor's place.

There is no such rule contained in the Contract Act. It is said, however, that such is the rule of common law in England, and that it has been applied in India and has thus become a part of out law. Reference in this connection has been made to a number of decided cases in which the supposed rule of English Law has been applied. The decision, however, are not all one way, and I shall presently be referring to several of them. What strikes me. However, at this stage is the impropriety of importing a rule of English law of contract--assuming that there be such a rule--into the law of our country over the head of an exhaustive statute of our Legislature dealing with the law of contract. This is apart from the consideration that by doing so we would be taking the place of the Legislature and introducing into our Contract Act something, which the Legislature apparently did not think it necessary or advisable to do.

(4) For the appellant Mr. Shamair Chand has put the case thus: If the money due in this case was payable at Amritsar, the Courts there have jurisdiction, otherwise not. To hold that the money was payable at Amritsar, it has to be found as a fact that the parties, either expressly or impliedly, agreed that it was to be so paid. For this purpose the contract between the parties and every circumstance attending that contract can be taken into consideration including the important fact that the creditor resides and works in Amritsar.

If on a consideration of all the circumstances it cannot be held as a fact that the money was to be paid at Amritsar, then the courts there have no jurisdiction, as the Indian Contract Act gives no direction that a Court can in the absence of any agreement--express or implied--conclude that the money was to be paid at the creditor's residence. According to Mr. Shamair Chand thus, the question involved here is essentially one of fact, and we cannot invoke an imaginary rule, which is not to be found in the Indian Contract Act, that the creditor must be paid at his place of residence or business even if there was no such agreement between the parties. To me it appears that this contention is sound. That was the view taken by a Division Bench of this Court in (S) AIR 1955 Punj 128. The suit there was for recovery of money due from the defendant. The suit was brought at the place of the plaintiff's residence, and reliance was placed on the rule that a debtor must seek his creditor and the money was, therefore, payable where the creditor lived. Repelling this contention, G. D. Khosla J. quoted with approval these observations made by Kapur J. who was also a member of the Bench, in a previous case:

'The technical rule of the debtor seeking the creditor is not applicable in India for the purpose of determining the local jurisdiction of the Courts because that would be engrafting something on to S. 20.'

The Division Bench held, therefore, that the suit could not be tried at Delhi, where the plaintiff was residing, merely because he was the creditor.

(5) Mr. Sodhi for the respondent agrees that this Division Bench decision covers the present case but submits that the decision was not correct, and he has referred to several cases taking a different view. In the Lahore High Court, for instance, Tek Chand J. sitting alone observed in Fazal Din v. Ghulam Mustafa 32 Pun LR 737.

'The proposition of law is firmly established that where it cannot be said that payment was agreed or intended to be made at a particular place the common law rule applies that the debtor must seek the creditor and pay him there, and, therefore, in such a case the creditor can maintain a suit at the place where he resides.'

The report shows, however, that in that case there was really no argument about this matter and learned counsel appearing for the opposite side conceded the applicability of the rule. There are undoubtedly several other cases in which a similar view was adopted but, as I have already remarked, the decisions are not uniform. The earliest case brought to our notice is a decision of the Bombay High Court Puttappa Manjaya v. Virabhadrappa 7 Bom LR 993. In that case, Sir Lawrence Jenkins, C. J., was invited to consider the applicability of the English rule to India, and what he said was this:

'There is no suggestion that the contract was made at Sirsi, or that it was to be performed there, but it is said, the payment was to be made there.

This argument rests upon the assumption that the Common Law rule applies that a debtor must seek out his creditor.

We think, however, in India the rule as to the place of performance, whether it be payment or any other mode of performance, is to be determined by S. 49 of the Contract Act; and applying that section to the facts of this case, we think, it is impossible to hold that the payment was to be made within the limits of the jurisdiction of the Sirsi Court, for, no such application has been made or place fixed as S. 49 prescribes.'

It is clear that the learned Chief Justice was wholly averse to his depending on any rule of English Law and thought that the proper rule, if any, must be found in the Indian Contract Act. In a recent decision of the Bombay High Court, however, Bharumal v. Sakhawatmal, AIR 1956 Bom 11, the view taken was that the common law rule of England should be applied because it was a reasonable rule and in conformity with justice and equity. The previous view of Sir Lawrence Jenkins was considered, but the Court found that that view had not been approved by the Privy Council in a later case, Soniram Jeetmull v. R. D. Tata and Co. Lt., AIR 1927 PC 156. Mr. Sodhi has largely depended on that Privy Council decision, which has been referred to in several later cases, but curiously enough, in support of each opposing view.

It was a case on appeal from Rangoon. The suit was brought by Tata Company Limited, who had a business branch in Rangoon and the suit was for payment of money due from Soniram Jeetmull on account of certain transactions between the parties. The contract itself was made at Calcutta, and the question was whether the suit to recover the money due could be brought at Rangoon. The High Court apparently found in favour of the plaintiff, and, when the defendants appealed to the Privy Council, it was contended that the Courts at Rangoon had no jurisdiction because the money was not payable there. The Privy Council found that the money was payable at Rangoon, but it does not appear that this was found as a matter of law. On the other hand, the report shows that the Privy Council was satisfied as a matter of fact, on a consideration of the circumstances attending the contract, that the money was to be paid at Rangoon. This is clear from several observations in the judgment, at the conclusion of which Viscount Sumner said:

'x x x x x their Lordships are satisfied that an intention is shown in the contract that payment should be made in Rangoon.'

It is difficult to say that this was not a finding of fact. At an earlier stage their Lordships observed:

'It is quite true the contract does not say where Messrs. Jeetmull are to pay, but it does say, by an implication which is indisputable, that they are to pay Messrs. Tata Sons and Company, and it follows that they must pay where that firm is. Hence one would think that, upon the fact of this contract, not indeed in express terms, but by the clearest implication, payment is to be made in Rangoon. In respect of the whole of this business it is not disputed that the business transactions, out of which the outstanding debts arose, took place in Rangoon, and for this purpose the branch of Messrs. Tata Sons and Company there were the Messrs. Tata Sons and Company concerned.'

This leaves no doubt in my mind that the conclusion of the Privy Council rested on the facts and circumstances of that case and not on the basis of any rule of law. The report shows, in fact, that it was objected on behalf of the opposite party that an attempt was perhaps being made to import into India a rule of English common law, and their Lordships denied that suggestion, observing.

'It was objected, however, in the High Court of Rangoon, that this constituted an importation of a technical rule of the English Common Law into the jurisprudence of India, namely, the rule that the debtor must seek out the creditor. The simple answer to that would have been that on the contrary it was a mere implication of the meaning of the parties.'

It is thus clear that it was found on the evidence that there was an implied agreement between the parties that the money would be paid at Rangoon and not that the Privy Council approved of the application of any rule of English Law to India. The Privy Council referred to the decision of Sir Lawrence Jenkins in 7 Bom LR 993 and then went on to refer to some other decisions of that court, which were not in accord with it, but it does not appear that they disapproved of the view taken by Sir Lawrence Jenkins that a rule of English Law cannot just be imported into the Indian Contract Act.

(6) In the Madras high Court this question touching the matter of jurisdiction, was considered by a Division Bench, of which Sir Arnold White C. J. was a member in Raman Chettiyar v. Gopalachari, ILR 31 Mad 223, Miller J., facing this question, firmly observed:

'The case is therefore one in which the place of payment is not specified either expressly or by implication, and it seems to me necessarily to follow that sub-division (iii) of explanation III does not apply.

Are we then entitled to apply the general rule of law? I think not. We are bound to seek the jurisdiction of the Court within the provisions of the Code (Civil Procedure Code), and if sub-division (ii) of explanation III is not applicable we have to see if any other sub-division is applicable,'

and later on-

'If the framers of the Code had intended that a plaintiff should, in the absence of a contract to the contrary, be allowed to sue at his place of residence to recover debts due to him in pursuance of contracts made elsewhere, there is no apparent reason why they should not have said so.'

Recently, in the same High Court, Ramaswami J. sitting alone had occasion to consider this question in G. Venkatesha Bhat v. M/s. Kamplapat AIR 1957 Mad 201, and he then said:

'x x x x x there has been a pronounced disinclination on the part of the Indian Courts to apply to this country unreservedly the English Common Law that a debtor should find and pay his creditor and that generally speaking the place of payment has to be determined independently of any such general maxim with reference to the terms of the contract the circumstances attending on it, the necessities of the case and having regard also to the statutory provision contained in the Code of Civil Procedure and in S. 49 of the Contract Act.'

I might here refer to S. 49 of the Indian Contract Act which is the only provision for a case where no place for performance is fixed. It says--

'49. When a promise is to be performed without application by the promisee, and no place is fixed for the performance of it, it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise, and to perform it at such place.'

This provision is, of course, of no assistance in the present case. The point, however, is that our Legislature did not think it necessary to make any other provision, the implication to my mind clearly being that the Legislature did not think it advisable to enact a rule like the one now relied upon by the respondent.

(7) Even more than the Privy Council decision in AIR 1927 PC 156 Mr. Sodhi relied on AIR 1956 Bom 111 for there the rule was firmly applied. The only reason mentioned, apart from this that it is a rule of English common law, is that it is in itself a reasonable rule and in conformity with justice and equity. It is, however, clear that it would be possible to find several rules of English Law, and for that matter rules of other foreign laws, just as good and just as much in conformity with justice as the rule now in question but I do not see how that would entitle the Courts to import into our laws all such rules. With great respect, therefore, I am unable to accept this reasoning.

(8) Mr. Sodhi referred to a number of decisions of the Allahabad High Court, starting with Sri Narain v. Jagannath, AIR 1917 All 128 and going on the Bhagauti Shukul v. Chandrika Prasad, AIR 1933 All 147, where the rule in dispute was applied. In a recent case, however, Sunderlal v. Jain Narain, AIR 1955 All 669, the view seems to have somewhat changed, and this rule was not applied on the ground that the suit was not for the recovery of a debt as such, but for accounts. There are other decided cases, to which reference was made but which it is unnecessary to discuss at length.

It is clear, that the authorities go both ways, and, as far as this Court is concerned, the decisions are against Mr. Sodhi, for apart from the Division Bench case I have mentioned, a previous decision in Piyara Singh v. Bhagwan Das AIR 1951 Punj 33, although concerning a negotiable instrument, expressed the view, through one of the members of the Division Bench, that the rule of English Law was not relevant to the matter of jurisdiction and in a later case reported as Prem Nath v. Kaudoomal Rikhiram 1958-60 Pun LR 161: (AIR 1958 Punj 361), Tek Chand J., sitting alone, also expressed the view that the common law rule of England did not apply for purposes of determining the forum where a suit is to be instituted, and for this view relied on the Privy Council decision in AIR 1927 PC 156.

(9) On principle, I can find no justification for importing into the Indian Contract Act or into the Code of Civil Procedure a rule of law which is not to be found in either statute, either because it is a rule of English common law or because it is in itself a good and just rule. Nor am I persuaded that on authority we should reverse the view adopted by the Division Bench of this Court when deciding (S) AIR 1955 Punj 128. I am, therefore, unable to hold that if money is borrowed or is otherwise due but no place for its payment to the creditor is fixed either expressly or by implication, it can be held as a matter of law that it is payable at the place of the creditor's residence and a suit for its recovery can, therefore, be brought where the creditor resides.

(10) The true position to my mind is that in each case it must be found as a matter of fact whether money was agreed, either expressly or impliedly to be paid at a particular place if a suit for its recovery is to be brought at the place. To find this fact the Court is entitled to take into consideration the contract and every circumstance attending that contract--including the ordinary residence of the creditor, the nature of the transaction itself, the circumstances in which it was made and various other factors--and, if the Court can find as a fact that payment was to be made at a particular place, then, of course, a suit for its recovery would lie there, but not otherwise. With this answer, I would send the case back, to the learned Single Judge for the decision of the appeal on merits.

Bishan Narain, J.

(11) I have had the advantage of reading the judgment of Dulat, J., and I agree with his conclusions given in last para of his judgment. In view of the importance of the question, I may, however, given my reasons for this conclusion.

(12) The plaintiff firm in the present case has filed a suit for recovery of the price of goods supplied to the defendant. This suit has been filed at Amritsar where the plaintiff firm carries on business, although the defendant firm carries on business at Haibergaon (Assam State). The plaintiff firm's case is that the Amritsar Court has jurisdiction to entertain this suit under S. 20(c) of the Code of Civil Procedure.

(13) Admittedly the territorial jurisdiction of a Court can be determined only under S. 20, Civil Procedure Code, in a suit of this kind. Under this provision of law a Court has jurisdiction where the defendant or one of the defendants resides or carries on business or where part of the cause of action arises. It is well established and is not disputed that part of cause of action arises where the parties by express or implied agreement have fixed a place for payment of the amount due from the defendant and has not been paid and the plaintiff files a suit for the recovery of this amount. Admittedly there is no express agreement to that effect in the present case. The plaintiff firm can, therefore, succeed in showing that the Amritsar Court has jurisdiction only by showing that there is an implied agreement by showing that there is an implied agreement by which payment was to be made at Amritsar. Obviously the terms of such an implied agreement can be determined only on the facts of each case.

(14) It is in this context that the plaintiff firm relies on the rule that a debtor must seek the creditor and perform his part of the agreement there. The plaintiff's case is that as a matter of law this rule must be deemed to have been incorporated in the agreement and that it must prevail in the absence of any other express or implied term to the contrary therein. In the alternative, the plaintiff's case is that this rule raises a presumption, though rebuttable, that the parties had impliedly agreed for the for the payment of the amount due at creditor's place of residence or business.

(15) The first contention, in my opinion, is based on misconception of the scope of the rule variously described in England as 'ordinary rule', 'general rule' or 'a common law rule'. This description to my mind excludes it from being considered as an abstract and rigid rule of law. If the learned counsel's contention be correct, then by fiction of law this rule must be deemed to have been incorporated in the agreement arrived at between the parties although the parties had never applied their mind and had never fixed a place of payment even impliedly of the money due. Such an introduction of a term in the agreement of parties by fiction of law, in my opinion, can be done only by statute and not by application of a rule which has been described as an ordinary or general rule. There is no such statutory provision in the Indian Contract Act or in the Evidence Act. Moreover, this contention, if correct, has the consequence of allowing a suit by a creditor in all cases to be filed at the plaintiff's place of residence or business and this is contrary to the provisions section 20 of the C.P.C. and to the policy underlying it. Moreover this conclusion will negative the possibility of proof of an implied agreement fixing a place for payment elsewhere as the incorporation of this rule in the agreement between the parties amounts to an express agreement which would necessarily exclude the existence of an implied agreement.

(16) Neither in England nor in this country has this rule ever been so construed as to lead to the conclusion that its incorporation in the agreement conclusively proves that the payment is to be made at creditor's place of residence or business or raises an irrebuttable presumption to that effect. In England when Courts consider as to where the contract ought to be performed, they invariably consider this rule and also other evidence and attending circumstances and then decide the matter. It is not necessary to discuss these authorities in detail as they are all mentioned in the various cases dealing with the matter. I may, however, mention the case Rein v. Stein, (1892) 1 QB 753 wherein Kay L. J. observed:

'Prima facie, in commercial transactions, when cash is to be paid by one person to another, that means that it is to be paid at the place where the person who is to receive money resides or carries on business.'

The use of the word 'prima facie' in this context is significant. I have gone through numerous English cases but in no case has it been held that the debtor must seek to creditor independently of facts and circumstances of each case.

(17) Similar is the position in India. The Privy Council in AIR 1927 PC 156, has described this rule as a mere implication of the meaning of the parties, or in other words the rule merely embodies what the parties may be said to have ordinarily intended to agree upon at the time of the contract. In no case in India has this rule been taken as a rigid rule of law raising an irrebuttable presumption in favour of the performance of the contract at the creditor's place of residence or business. I would, therefore, repel this contention raised on behalf of the plaintiff firm.

(18) This brings me to the alternative case of the plaintiff firm. It is argued that the application of this rule involves raising a presumption in the first instance, although rebuttabable, that there is an implied agreement between the parties that the amount due from the debtor is payable at the creditor's place of residence or business. It may be stated here that admittedly, and for obvious reasons, this rule has no application where parties have by express agreement fixed a place for payment of the money due to the creditor. There is no doubt that when money is advanced as a loan or goods are sold for a price, then the parties necessarily intended to fix a place where payment is to be made by the debtor.

This is the necessity of the case. If they fail to do so, let us say for reason of forgetfulness, then ordinarily it may be fairly presumed that a place would have been fixed where the creditor, will find it convenient to receive the money and such a place may be considered to have been impliedly agreed upon by the parties. There, however, may be circumstances in a particular case where a creditor on the ground of his own convenience or on the ground of expediency or on account of exigencies of business may be said to have impliedly preferred to fix a place other than his own place of residence or business. This rule embodies a rule of evidence based on common course of natural events and on human conduct in commercial transactions. There is nothing in the Indian Contract Act or in any other statute to exclude its application or consideration in this country.

Courts are, however, not bound to draw a presumption in favour of creditor's place of residence or business in every case. The applicability of this rule and the extent to which it should prevail depends on the facts and circumstances of each case. When determining the terms of an implied agreement regarding place of payment, the Courts must take into consideration all the relevant factors bearing on the point, for example necessities of the case, convenience of the plaintiff, the place of business or residence of the creditor, the nature of the contract and its other terms, the circumstances in which it was entered into and the course of dealings between the parties.

I may say that this list is not exhaustive but these are the some circumstances that occur to me at this time. It is for the Court to gather the intention of the parties in this matter after consideration of all relevant circumstances proved in the case,. At this stage I may be permitted to say that in this view of the matter the rule under consideration will not be relevant in a case where creditor seeks to recover his dues on the basis of a negotiable instrument as the Negotiable Instruments Act, 1881, lays down rules for determining place of payment of the amount due under a negotiable instrument (section 60 to section 70). If the Court comes to the conclusion that impliedly the parties had agreed to fix place 'A' for payment of the money due, then a part of cause of action would arise there and a suit filed at that place would be within the jurisdiction of the Court.

If the Court, however, is unable to come to a definite conclusion as to where the parties in the circumstances intended to have agreed to fix a place for payment at the time that the contract was entered into, then it must be held that the plaintiff has failed to prove that part of the cause of action so far as it depended on the place fixed for payment has not been proved to have arisen where the suit has been filed. In that case the plaint must be returned to the plaintiff for presented to proper Court.

(19) I would, therefore, in agreement with Dulat J, send the case back to the learned Single Judge of decision of the appeal on merits.

Dur, J.

(20) I agree with my learned brethren Dulat and Bishan Narain JJ., whose separate judgments I have had the advantage of perusing, that in each case it is for the Court to find as a matter of fact whether the money was agreed either expressly or impliedly to be paid at a particular place and if for that reason a suit for its recovery can under the C.P.C. be instituted there. The question has been dealt with at great length in the judgments prepared by them and it seems unnecessary for me to discuss those points in detail. I would merely like to add that in order to ascertain the intention of the parties to a contract, and to infer therefrom an implied term, not expressly contained in the agreement, as to the place where the payment may be deemed to have been intended to be made, the Court has to come to a finding which is essentially one of fact.

It is true that in ascertaining the implied intention of the parties, the Court may take into account the nature of the transaction, the terms of the contract, the conduct of the parties and all other surrounding circumstances, but this the Court is authorised or entitled to do, not because of, but independently of, the rule of English Common law that a 'debtor must seek out his creditor.' It is hardly profitable in the case in hand to consider the precise extent and scope of the above rule as in force in England; suffice it to say that keeping in view the conditions prevailing in this Republic--particularly its territorial vastness--I am extremely doubtful, if any such rule as its language prima facie connotes, can, at all, generally speaking, be considered to be just and equitable to be applied in this country for the purpose of ascertaining the place of payment so that the forum for the institution of the suit may be determined.

In a small country like England the Courts there may have considered it just and convenient that, in the absence of any agreement, a debtor should, as a general rule, seek out his creditor, if within the realm in order to make the payment of the debt to him, but in a big country like ours, to impose an obligation on a debtor, at the time of making payment, to seek out his creditor, wherever he may be in the whole length and breadth of this Union, may, not infrequently, operate as an unjust, inconvenient and inequitable rule, particularly when the applying this rule jurisdiction is sought to be conferred on a Court within the local limits of whose jurisdiction the creditor-plaintiff happens to reside at the time of the institution of the suit. I am not unmindful of the fact that the creditor's place of business or residence, as the case may be at the time when the contract was made, may often be deemed, by fair implication of fact, to be the place of performance contracted for, but then, as I have already observed, this is without reference to the above principle of the English common law which enjoins upon the debtor to seek out his creditor at the time of making payment; besides, this factor is only one out of several to be taken into account in the light of all the attending circumstances of each case.

(21) It would thus appear that the Court has, if possible, to ascertain, as a fact, the alleged implied term of the contract fixing the place of payment--a term to which both the debtor and the creditor may, in a given case, be fairly deemed to have agreed. The existence of such an implied term would, of course, be determined by the Court, taking into account the circumstances mentioned by me earlier, having regard to the common course of human conduct and public and private business, etc. Since the Court has to find an implied term of a bilateral agreement, it is obvious that convenience, when a relevant consideration, must be taken into account from the point of view of both the parties and not only one of them.

(22) In my opinion, therefore, for the purpose of determining the forum where a suit by the creditor is to be instituted, the Courts in this country cannot apply the rule of English common law that the debtor must seek out his creditor and make the payment wherever he may happen to be; to this extent I would respectfully agreed with the decision in (S) AIR 1955 Punj 128. Further than this it is hardly necessary to go in the present case.

(23) With these observations I concur with the order proposed by Dulat, J.

OPINION OF THE COURT

(24) Where territorial jurisdiction of the Court is to be determined on the ground that the price of goods was payable within its jurisdiction, the Court should find as a fact whether the money was agreed expressly or impliedly to be paid within its territorial jurisdiction. To find this fact the Court is entitled to take into consideration the contract, its attending circumstances, the creditor's ordinary place of residence or business and the course of dealings between the parties including all the other factors relevant in a given case. If the Court comes to the conclusion that on the facts and circumstances established in the case the amount sought to be recovered was payable within the jurisdiction of the Court, then it should proceed to entertain the suit, otherwise it has not jurisdiction to do so on the basis of this ground.

(25) We direct that the case be sent back to Single Bench for decision of the appeal on merits.

(The case was remanded to the Single Judge, Bishan Narain J., who finally disposed of the case.)

(26) Baij Nath, proprietor of the firm Das Mal--Baijnath, filed a suit for the recovery of Rs. 1,300/- from the firm Hira Lal Girdhari Lal of Haibergaon, district Nowgong (Assam) on the allegation that the plaintiff firm had sold certain goods to the defendant firm and that the defendant firm had not paid their price. This suit was filed in Amritsar Court. The defendant firm pleaded that the Amritsar Court had no jurisdiction. The trial Court upheld this plea and directed the plaint to be returned for presentation to proper Court. On plaintiff's appeal, however, the District Judge, Amritsar remanded the case to the trial Court after framing an issue reading: 'Whether the defendant took the goods on credit?' This decision was based on the assumption that the rule that a debtor must seek the creditor applies in all circumstances in this country. Dissatisfied with this remand order, the defendant firm filed the present second appeal in this Court. When the matter came up before me, I referred it to a Division Bench for determination whether this rule is applicable in this country. The Division Bench in its turn referred it to a Full Bench. The Full Bench now has given its decision.

(27) The second appeal has now come up again before me for decision. It is clear that the learned District Judge had framed the issue for decision on the assumption that the rule that a debtor must seek the creditor rigidly applies to this country. This view has not been accepted by the Full Bench. The learned District Judge did not discuss the circumstances and the evidence on the matter relating to the place where payment was to be made. In the circumstances, I am of the opinion that this case should be sent back to the District Judge for decision in accordance with law after taking into consideration the observations of the Full Bench. The necessary consequence of this order is that the order of the District Judge remanding the case for decision of the issue framed by him is set aside. It would, however, be open to him to decide the case and if he considers it necessary this order will not be taken to mean that a fresh issue cannot be framed for decision in accordance with law. I should, however, not be understood to suggest that such an issue is necessary. It depends on the discretion of the learned District Judge.

(28) The result is that this appeal is accepted and the case is remanded to the learned District Judge for decision in accordance with law. The parties have been directed to appear before him on 23-5-1960. There will be no order as to costs.

(29) Appeal allowed; case remanded.


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